Union Properties, the master developer of Dubai’s Motor City district, is planning a Dh200m new expansion of the Dubai Autodrome and is studying turning three of its units into private joint stock companies.
The developer is in the "final stages" of signing a preliminary agreement with China National Chemical Engineering for the new expansion project of Dubai Autodrome, one of Motor City’s landmarks, Union Properties said in a statement to the Dubai Financial Market (DFM), where its shares trade, on Sunday.
The expansion project will be a "paradigm shift, bolstering Dubai Autodrome's growth, and reflecting on the parent company Union Properties, expanding its presence," the company said in the statement.
The move comes after the developer last month said it appointed Khalifa Al Hammadi as chief executive as it continues to restructure and manage its accumulated losses. The developer has struggled to maintain growth in profitability in the wake of a softening real estate market in the UAE. The company in November said its third quarter loss widened 32 per cent on the back of lower revenues and a loss incurred on the value of financial assets it holds.
Dubai Autodrome, the 5.39-kilometre FIA-certified track opened in October 2004, is one of the main landmarks of the Dubai suburb and is popular with car enthusiasts.
The move to expand the Autodrome comes amid expectations of a boost in UAE's tourism sector on the back of the upcoming Expo 2020 and efforts to attract more visitors, the developer said.
Union Properties' executive board has also conducted a study and plans to turn three of its units - ServU, The Fitout, and Dubai Autodrome -into separate private joint stock companies, it said in the statement.
These companies will have their own governance standards and will pursue independent institutional management strategies, the company said.
The firm is trying to address the issue of accumulated losses by developing its land bank, creating assets with recurring income and “aggressively following up on its outstanding receivables through legal process”, Union Properties said in December.
Its third quarter net loss reached Dh81.5 million, deepening further from Dh61.8m reported at the end of the third quarter of 2018. Revenue also dropped 29 per cent year-on-year to Dh106.2m.